ENERGY POLICY

The Interior Department would be the lead agency for permitting new "high priority" transmission lines on federal lands under a draft bill from Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.).

Bingaman released new drafts of the transmission and nuclear power sections of the comprehensive energy bill on the eve of today's planned markup. But the committee last night delayed plans for a markup this morning on transmission siting and nuclear energy provisions.

Bill Wicker, a spokesman for Bingaman, said a long series of Senate votes this morning will require committee action on those matters to be rescheduled. The committee will, however, go ahead with plans to take up S. 949, a bipartisan bill to expand and improve Energy Department programs to provide loan guarantees and other financing for low-emissions energy projects.

The delay will give members time to digest the new transmission draft that lays out a schedule for the Interior secretary to site "high priority" transmission lines on federal lands, including giving each federal agency 60 days to comment on concerns or chances for approval on a project's pre-application and 1 year to finish environmental reviews when all necessary information is submitted. The previous draft had the Federal Energy Regulatory Commission as the lead agency, although FERC would retain backstop authority to certify construction of the high-priority transmission lines.

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The draft encourages the Interior secretary to use "energy corridors" on federal lands created in the 2005 Energy Policy Act to site transmission but grants the secretary the power to create an additional energy corridor as necessary.

The changes were made in response to committee members who thought that federal land siting was better housed with Interior than FERC, Wicker said.

Interior Secretary Ken Salazar has emphasized the need for his department to streamline the bureaucracy of siting transmission lines on federal lands to develop more renewable energy. His first secretarial order formally established a task force to identify specific renewable energy zones and transmission corridors on public lands (E&ENews PM, April 4).

After his confirmation hearing, the former Colorado senator told reporters "in many ways, the Department of Interior is the real energy department," but he also said jurisdictional bureaucracies should not get in the way of permitting projects to develop renewable energy.

Wicker said Bingaman was fine with making the change as he is carefully working with all members to craft the transmission bill. "Nobody really reacted one way or another that that was some sort of sea change," he said.

Bingaman's new transmission draft also opens the door to more than a single interconnection-wide planning entity to plan the high-priority transmission lines, but allows FERC to modify the plans in order to adhere to the achieve policy goals and to reconcile inconsistencies between plans submitted.

The draft still requires any power line project developer to apply for state approval first but if the state rejects the project, does not consider the project within one year or places "unreasonable" conditions on the project that create insurmountable barriers to complete it, FERC would then have the authority to consider and site "high priority" transmission projects.

The National Association of Regulatory Utility Commissioners applauded Bingaman's changes, especially the decision to give states the first shot at siting approval and that the one-year clock starts from the time of a completed application. But the association of state regulators said it would prefer 18 months to review the applications.

Nuclear

The new nuclear waste draft still would create an 11-member commission selected by the president and give the panel two years to assess options to handle the nation's nuclear waste, including permanent deep geologic repository, long-term storage on-site, long-term storage at regional sites and reprocessing, as well as the review of the Yucca Mountain selection and site characterization for "lessons learned" for future projects and an incentive program for perspective host sites.

Bingaman added a provision that would require the commission to review the current research and development reprocessing program and to recommend measures it determines "necessary or advisable" to support industry efforts to obtain a license for spent nuclear fuel reprocessing from the Nuclear Regulatory Commission.

Another addition would have the commission study alternative approaches to the management of the civilian waste facilities, including the option of placing nuclear waste management in a private corporation or an alternative federal entity other than DOE. The commission would also re-evaluate the Nuclear Waste Fund -- which consumers of nuclear electricity have paid more than $20 billion of fees into -- and how waste management should be financed.

Amendment previews

The changes were made after a "walk through" on the transmission draft last week and ongoing discussions with members that lasted through Monday evening, according to ranking member Lisa Murkowski (R-Alaska).

But the changes to the transmission draft did not address cost allocation, the most controversial topic on that issue. Members on both sides of the aisle voiced concerns about how FERC would define who benefits from a line and would therefore have to pay for the transmission construction.

"The cost allocation is probably the biggest concern that is yet outstanding," Murkowski said. "I fully anticipate that there is going to be some good debate on that issue, and I expect to see amendments offered on both sides," she said. Murkowski said she had not decided yet on whether to offer an amendment on cost allocation.

Sen. Bob Corker (R-Tenn.) said he planned to offer an amendment that would change the language for an exception to bearing the cost of a transmission line in the region from "disproportionate to reasonably anticipated benefits" to "unless the costs are reasonably proportionate to measurable economic and reliability benefits." Sen. Jeanne Shaheen (D-N.H.) was also very concerned about the vague details of cost allocation during the walk through.

There is also the issue of reserving the lines for energy generation that has low greenhouse gas emissions -- narrowing the main use of the lines for natural gas and renewable energy. Sen. Maria Cantwell (D-Wash.) raised the issue at the walk through, and it is also a priority for Senate Majority Leader Harry Reid (D-Nev.).

On the nuclear side, Murkowski said she plans to offer a "comprehensive" amendment alternative to Bingaman's nuclear waste text. The amendment would include additional production tax credits and construction tax incentives for new nuclear reactors, as well as a cost-sharing provision for licensing and engineering design for two commercial reprocessing facilities (E&ENews PM, May 5).